S&P gives Fujian Yango notes B-

S&P said it assigned its B- long-term issue rating to the proposed dollar-denominated senior unsecured notes by Yango (Cayman) Investment Ltd., a subsidiary of Fujian Yango Group Co. Ltd.

Fujian Yango will guarantee the notes and intends to use the proceeds primarily to refinance its debt.

“We rate the proposed senior unsecured notes one notch below the issuer credit rating on Fujian Yango to reflect substantial structural subordination risk. As of June 30, 2019, Fujian Yango's capital structure consisted of about Chinese renminbi (RMB) 99 billion in secured debt and RMB 37 billion in unsecured debt. The secured debt ratio of about 73% is significantly above our notching threshold of 50%,” said S&P in a press release.

S&P said the sale of the notes will release some short-term refinancing pressure for Fujian Yango. The outlook is stable.

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